The Dow Jones (DJIA) is set to reverse overnight losses and open Thursday’s trading session in positive territory after initial jobless claims came in lower-than-expected.
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For the week ended August 23, 229,000 Americans filed new applications for unemployment benefits, below the estimate for 230,000 and down 5,000 from the prior week. In addition, continuing jobless claims for the week ended August 16 fell by 7,000 to 1.954 million, also below the estimate for 1.966 million.
Companies Slow to Fire and Hire
In a theme that has persisted for several months, companies remain hesitant to fire and hire as the U.S. tariff rate has climbed to its highest level since 1933. At the same time, the unemployment rate has remained steady between 4.0% and 4.2% since January, signaling no major labor market effects from the Trump administration’s tariffs.
Following the new data, the odds of a rate cut during the September 16-17 Federal Open Market Committee (FOMC) meeting fell to 85.3% compared to 88.7% yesterday, according to CME’s FedWatch tool. With a stronger-than-expected labor market, the Fed has less of a reason to cut rates.
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